PRC-1 · Chapter 6 · Question 21 of 100
In the disposal journal entry, how are the original Cost and the Accumulated Depreciation of the disposed asset fundamentally handled to remove them from the ledger?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: B) Cost is Credited, Accumulated Depreciation is Debited.
Explanation
To remove the asset completely from the books, the asset's original cost account (a debit balance) must be credited, and its accumulated depreciation account (a credit balance) must be debited.
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